Asian chip stocks rose in early trading on Thursday after US AI chip darling Nvidia reported strong third-quarter earnings, a sign that worries about an AI bubble are not slowing down the AI industry.
South Korea’s SK Hynix pared gains to nearly 2%. The memory chip maker is Nvidia’s main supplier of high-bandwidth memory used in AI applications.
Samsung Electronics, which also supplies Nvidia with memory, rose more than 5%. The firm is working to catch up with SK Hynix in high-bandwidth memory to land more deals with Nvidia.
Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker, which makes most of Nvidia’s chip designs, rose more than 4% in Taipei. Hon Hai Precision Industry – also known as Foxconn, a maker of server racks designed for AI workloads – rose 3.28%.
The Asian chip giant’s rise comes after Nvidia’s earnings beat Wall Street expectations on Wednesday and the firm gave stronger-than-expected sales guidance for the fourth quarter.
Nvidia’s sales and outlook are closely watched in the tech industry as a sign of the health of the artificial intelligence boom, and its earnings come amid recent market fears about an artificial intelligence bubble, SEEbiz reports.
However, the firm’s strong results and forecast should ease immediate concerns about an AI bubble, Rolf Bulk, equity research analyst at New Street Research, told CNBC.
“Demand is diverse, AI-native firms are deploying AI agent solutions, and enterprises are increasingly integrating AI into their existing products and services,” Bulk said.
“We expect Nvidia’s results to drive higher earnings estimates across the sector, including their primary GPU supplier TSMC, memory suppliers SK Hynix and Samsung, and the broader Asian subcomponents and assembly value chain,” he added.
In Tokyo, Renesas Electronics, a key Nvidia supplier, pared gains to 1.51%. Tokyo Electron, which supplies essential chip-making equipment to foundries that make Nvidia’s chips, rose 5.67%. Another Japanese chipmaker, Lasertec, rose more than 6%.
Japanese tech conglomerate SoftBank jumped nearly 7% at the open and last traded up 2.66%, although the company recently sold its Nvidia shares. Softbank majority owns British semiconductor firm Arm, which supplies Nvidia with chip architecture and design.
SoftBank is also involved in a number of AI ventures that use Nvidia’s technology, including the $500 billion Stargate project for data centers in the US.
“There’s a lot of talk about an AI bubble,” Nvidia CEO Jensen Huang told investors on an earnings call. “From our perspective, we see something very different.”
